Rabobank Identifies US$10.2 Million in Savings

Within four months of rolling out improved transparency and reporting, Rabobank identifies and eliminates US$10.2 million in redundant IT services.

While many IT shops are organized around processes and technologies, Rabobank Netherlands is taking another approach. The Utrecht, Netherlands-based bank's technology organization is in the latter phases of a multiyear initiative to reorganize around the delivery of services to internal customers and, in turn, reduce redundancies.

After adopting Information Technology Infrastructure Library (ITIL) principles and deploying HP's (Palo Alto, Calif.) IT Service Manager software, Rabobank's IT department began assigning services and costs to its business units in 2006, recalls Toine Jenniskens, the bank's VP and business information manager. But those internal customers, along with senior management, soon began requesting more transparency, according to Jenniskens, who notes that existing reporting tools were insufficient. "Service Manager's reporting capabilities didn't adequately address business value," he says.

For assistance, Rabobank Netherlands, a division of Rabobank Group (US$870.9 billion in assets) turned to a trusted IT consultant who had recently joined London-based PA Consulting. In just a few months in 2006, Jenniskens reports, PA determined that Rabobank lacked a single overview of the multitude of hardware and software resources under management, including the bank's IBM (Armonk, N.Y.) mainframe, its Microsoft (Redmond, Wash.) Windows/Linux-enabled LAN and its SAN, which is based on EMC (Hopkinton, Mass.) technology.

Over the next two years PA and HP teams worked with approximately 100 Rabobank staff members to develop and implement a solution. First, according to Jenniskens, PA designed a unified IT service management model for aggregating computing resources, processes and cost information. "When you have a number of models within your organization, everyone has their own version of the truth," he explains. "By bringing in a common model, we created a common truth."

Throughout 2008 human processes were restructured to align with the model, relates Jenniskens, who notes that HP concurrently integrated the service management framework into Service Manager and other tools in the vendor's business technology optimization (BTO) software suite. Then, to accurately and efficiently populate the model, in early 2009 Rabobank implemented HP's automated inventory discovery software, Discovery and Dependence Mapping (DDM), for gathering specifics about individual servers, firmware, middleware, operating system versions, applications and other details.

For storing discovered data, Rabobank built a homegrown data warehouse with the intention of purchasing a more robust solution in the future. Despite the added automation, however, human interaction is still required, Jenniskens concedes. "For example, you can't 'discover' an SLA [service-level agreement]," he says. "It must be entered manually."

Drilling Down

With the data layer chores accomplished, the reporting layer was finally added, permitting Rabobank to drill down to learn precisely what hardware, software and associated service agreements comprised a given business process. "Initially the reporting front end was built in-house, using Microsoft Access, with reports delivered in spreadsheet format," says Jenniskens. "Now, for more intuitive report generation, we're also integrating QlikView by Qlik Technologies [Radnor, Penn]. Like the data warehouse, we want to continue moving off the homegrown solution because we prefer to work with a vendor that has the expertise."

Not surprisingly, the most significant initiative hurdle, according to Jenniskens, has been driving organizational change. "Getting people to understand the service model and, once they understand it, use it correctly is critical," he affirms. "By integrating the model into our enterprise architecture, anyone who rebuilds anything must use it."

By any measure, the initiative has been successful. Within the first four months of the reporting capabilities going live in mid-2009, Rabobank realized approximately US$10.2 million in cost savings by identifying unnecessary resources and either eliminating or reassigning them, Jenniskens relates. "In addition, we've reduced the complexity of maintaining hundreds of models," he reports. "And our business users are really happy with the detailed reports they receive, showing what IT is delivering in terms they understand."

Going forward, Rabobank will continue to build out the model's capabilities, Jenniskens says. Additionally, HP is incorporating the model into its development cycle. As a result, more savings are expected. "We're continuing to use resources more efficiently and effectively," Jenniskens asserts. "We've definitely gained value from the journey."